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Tips to Rebuild Your Precious Credit

Tue, 06/03/2014 - 1:54pm | by Helen Hoart

Obtaining loans and credit with a low interest rate requires a strong credit history. However, when financial challenges arise that make it hard to maintain high personal credit scores it is important to begin rebuilding as fast as possible. By taking measures to rebuild your credit immediately after a foreclosure or bankruptcy it is easier to recover from the financial challenge.

Buy a Car

Recovering from a foreclosure in North Carolina is not uncommon. The state saw a 25.7 percent  increase in foreclosures  in 2012, said Richard Craver of Journal Now. Despite recovery efforts, families are still struggling to pay all of the bills and the mortgage is taking a hit.

After a bank files a foreclosure, it is important to take measures to recover financially. A simple way to start rebuilding credit ratings and history is buying a car. A buy here pay here lot is not the only option available to consumers. Buyers can find a wide range of used cars online and many dealers are willing to work around poor credit ratings. Buying a used vehicle is one of the easiest ways to start rebuilding.

Check Out Your Credit Report

After a foreclosure or bankruptcy, it is important to review your credit reports. Confirming where your credit report stands will make it easier to start rebuilding, said Stephanie Taylor Christenson of Mint.com.

Every consumer is eligible for a free credit report from the three credit reporting agencies each year. After obtaining the reports, look for any inaccurate details, fraudulent activity and wrong information. If anything is inaccurate contact the credit bureaus and request an investigation. The bureaus will require proof that the information is inaccurate, so it might be necessary to send in bank statements to fix the data.

Obtain a Secured Credit Card

A secured credit card can help rebuild your credit score and reduces the risk to the bank, said Lynnette Khalfani-Cox of Daily Finance. The way secured credit cards work is simple: a set amount of money is given to the bank and that amount becomes the credit limit. The card is used like any other credit card, but the bank has security in case a default occurs.

After using the card responsibly, the credit limit will increase without requiring additional security. Regular on-time payments and the increase in credit limit will result in positive marks on a credit history report.

Always Pay Bills on Time

Although a foreclosure or bankruptcy will have a negative impact on your credit rating, taking measures to pay every bill on time after the foreclosure goes through will provide the opportunity to rebuild. The payment history on bills impacts 35 percent of the credit rating, according to MSN.com, and should never be overlooked when it comes to rebuilding. Making on time payments to credit cards, new loans, rent, utility companies and any other bills on a personal account will prevent further negative marks.

Facing a foreclosure or a bankruptcy is a challenge for any consumer. Although it negatively impacts on the credit score, recovering is possible. By taking the time to review your information and pay bills on time your credit score will improve.

 

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